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What To Watch In The Canadian Markets This Week

Published 2020-02-17, 09:11 a/m

Several marquee Canadian companies will be reporting earnings this week.

First up will be Air Canada and Nutrien on Tuesday.

Air Canada (TSX:AC) will be reporting fourth-quarter results for the three-month period ending Dec. 31. In the third quarter, the airline reported an EBITDA of $1.472 billion, which represented a 9% increase from the $1.351 billion posted in the same period in the previous year. Air Canada reported third quarter 2019 operating income of $956 million compared with $923 million in operating income in the same period in 2018.

Nutrien Ltd (TSX:NTR) will be reporting after the closing bell on Tuesday, when it reveals its fourth-quarter results for the period ending Dec. 31. This Saskatoon-based company is the largest producer of potash in the world and the third largest producer of nitrogen fertilizer on the globe.

In November, Nutrien posted earnings for its third quarter of $4.13 billion, up from $4.03 billion for the same period in the previous year.

The next big day for earnings reports will be Friday, when the Royal Bank of Canada, mining company Teck Resources Ltd. and pulp-and-paper giant Canfor Corp make public their latest financial reports.

The Royal Bank of Canada (TSX:RY) is expected to unveil its first quarter earnings before the opening bell. During the previous quarter it posted a net income that set a new record for the year that ended Oct. 31 – $12.871 billion, which was up $440 million, or 4%, from the previous year. The showing reflected a strong growth in the personal and commercial banking and wealth management sectors.

Over at Teck Resources (TSX:TECKa), investors will be looking to hear any information about the company’s proposed $20.6-billion oilsands mining project in Northern Alberta. The Trudeau government is expected to decide at the end of this month whether it will allow the project to proceed. The biggest hurdle the plan, which is projected to create almost 10,000 jobs and generate an estimated $12 billion in income and capital taxes for Ottawa, faces is how it will affect Canada meeting its carbon emission targets.

On Thursday, Canfor Corporation (TSX:CFP), a British Columbia-based forestry products producer, and its subsidiary Canfor Pulp Products will make public their earnings for Q4 2019. Company executives will host a conference call to discuss them the following morning.

The companies, which produce a range of wood products and pulp and paper, have seen their financials slip since mid-2019, which has translated into dips in their share prices.

Last October, Canfor reported a third quarter operating loss of $124 million and an adjusted operating loss after factoring in duties, restructuring costs and a reversal of inventory write-down provisions of $69 million. This added to its Q2 downturns, bringing its year-to-date operating losses to $243.6 million. Its stock price has lost more than 12.6% in the last year, closing last Friday at $13.84. At the end of October, the share price was hovering around $15.92, which was substantially below a high of $32.47 it hit in the spring of 2018. Tariffs on Canadian wood products, wildfires and rail disruptions in the past year have all presented challenges for both companies.

Inflation Numbers Due Out Wednesday

Statistics Canada will release its latest Consumer Price Index for January on Wednesday.

The CPI rose 2.2% on a year-over-year basis in December, the same as in November. Excluding gasoline, the CPI rose on 2%, however, the smallest increase since November 2018.

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